What can cause wastage in a business?

Wastage in a business is often linked to poor quality and overproduction. When products are of subpar quality, they may have higher rates of returns, spoilage, or disposal, leading to losses in materials and resources. Furthermore, overproduction can lead to excess inventory that either goes unsold or becomes obsolete, incurring additional costs for storage, handling, and potential markdowns. These factors not only impact profitability but also tie up capital that could be better utilized elsewhere in the business. Therefore, addressing these issues is critical for improving efficiency and reducing wastage in operations.

In contrast, having a loyal customer base and effective employee training typically contributes positively to a business's performance. A loyal customer base suggests repeat business and customer satisfaction, while effective employee training enhances productivity and reduces errors, both of which can lead to less wastage. High demand for products usually means efficient production and sales, as businesses align their output closely with consumer needs, minimizing excess production issues.